U.S. Sees Progress on Worker Rights in Guatemala but Warns More is Needed

Wednesday, October 30, 2013

Sandler, Travis & Rosenberg Trade Report

U.S. Trade Representative Mike Froman this week said that Guatemala has made progress improving worker rights over the last six months but warned that “significant work remains.” In April a DR-CAFTA arbitration panel was suspended after the U.S. and Guatemala agreed on an 18-point enforcement plan to resolve concerns raised in a 2008 labor complaint, but Froman said the panel could be reactivated if Guatemala does not comply with the provisions of that plan.

According to a USTR press release, Froman recognized that Guatemala has adopted a number of reforms under the enforcement plan. A ministerial accord and directive to the national police aims to ensure police assistance to facilitate labor inspector access to worksites, and 100 new inspectors were hired. To strengthen export companies’ compliance with labor laws, the Ministry of Labor must now conduct annual inspections of all enterprises receiving tax benefits under special provisions of Guatemalan law and the process of revoking those benefits for beneficiaries that violate labor laws has been streamlined. Standardized procedures and criteria were established for verifying employer compliance with labor court orders, and a new Inter-Institutional Rapid Response Team will attempt to prevent closures of export enterprises receiving tax benefits and to ensure payments owed to workers if the closure cannot be prevented. In light of these measures, the U.S. will support the continued suspension of the arbitration panel for the time being.

However, Froman also identified particular areas in which the U.S. “expects solid progress … over the next six months.” These include making every effort possible to swiftly pass legislation providing for an expedited process to sanction employers that violate labor laws and to implement a contingency mechanism to address payment to workers in cases where export enterprises have closed. “Serious efforts” are also needed to ensure that the instruments and procedures issued under the enforcement plan are effectively implemented and enforced. USTR warns that if the U.S. determines at any time during the next six months that Guatemala is not effectively implementing the enforcement plan it can request that the arbitration panel resume its work.